In my book Who’s Investing Your Money?, I warned about the coming financial storm. Well, It’s here!
In it, I discussed how a typical 60/40 stock/bond or balanced mutual fund portfolio would no longer provide the long term returns you need to meet your retirement goals. Stocks will underperform, and bonds will offer very little return going forward.
For your portfolio to recover and continue to provide you with the long-term returns you have come to expect, you will need to add Alternative Asset Classes such as Private Real Estate and Private Equity to your portfolio.
Source: GMO, Mauldin: The 60/40 Portfolio Is Riskier Than Ever[1]
Private Equity and Private Real Estate as an asset class are uniquely different from public stocks. They tend to hold their value or even go up in value during a stock market correction, reducing the overall risk and volatility of your portfolio.
I also outlined in my book, why you should be working with a Portfolio Manager who has the discretionary authority to act proactively to protect your portfolio from the impact of a market correction.
As with any market correction, the best strategy is not to panic during a market correction because the market will eventually recover.
To recover losses incurred during a market correction, you need to be in the market to participate in the recovery. That is hard to do when your portfolio has gone through a significant correction.
To mitigate the temptation to cash out of the market, you need to have a portfolio that is insulated from market volatility without reducing overall long-term portfolio returns.
So how do you find a Portfolio Manager that has the expertise to invest in Alternative Asset Classes and has the discretionary authority to protect your portfolio proactively?
Good question!
I cover this extensively in my book Who’s Investing Your Money? – 7 Key Questions to Ask Your Financial Advisor. This book examines the various types of advisor registrations, their limits and abilities and will help you find the right advisor for you.
To learn more about how Alternative Assets can help your portfolio recover from the recent market correction, please call me at (604) 855-6846 or email me at aspitters@pfcwealthsolutions.com
Who’s investing your Money is available as a free PDF download at www.whosinvestingyourmoney.com
Alternatively, the book is available from Amazon.ca as a paperback and Kindle version from this link: Who’s Investing Your Money? – Amazon
[1] “GMO 7-Year Asset Class Forecast: August 2019.” Home, https://www.gmo.com/americas/research-library/gmo-7-year-asset-class-forecast-1q-2020/
